With the countdown to the end of his presidency underway, President Joe Biden has been fielding a variety of last-minute appeals to address an array of social and environmental issues—from attempting to head off an off-shore drilling bonanza promised by President-elect Donald Trump to the usual pardons and commutations doled out by departing presidents.
U.S. Catholics opposed to the death penalty were among those who pressed for clemency for inmates on the federal death row. They were rewarded on Dec. 23 when Mr. Biden commuted the death sentences of 37 of those inmates.
Partly inspired by that success, one that seemed to rely at least a little bit on the president’s Catholic sensibilities, another group of Catholic activists is seeking a final Biden administration assist on another potentially life-saving matter. More than 60 Catholic institutions, congregations and individuals have signed a letter imploring Mr. Biden to endorse a new round of assistance to the world’s most indebted nations from the International Monetary Fund.
Signatories even include the Sisters of St. Joseph, the order that ran the grammar school Mr. Biden attended as a child in Claymont, Del. How can his Catholic guilt resist that level of tweaking? The debt-relief proponents have until Jan. 20 to make their case.
In a letter to the president on Dec. 18, the signatories urged Mr. Biden “to use your executive authority to provide people around the world with direly needed relief from their suffering in the face of poverty, hunger, and natural disaster, by supporting a new issuance of Special Drawing Rights (SDRs) at the International Monetary Fund (IMF). Such a move will cap your legacy of global leadership.”
S.D.R.s are financial instruments that represent baskets of international currency prepared for client countries of the I.M.F. They can be held on a national balance sheet to improve sovereign debt ratings, used to pay down debt to help stave off a debt crisis or converted into hard currency like U.S. dollars to spend on immediate needs.
Diane Koorie, R.S.M., of Oklahoma City, is among the individuals who urged the president to push for an affirmative position by the Treasury Department on S.D.R.s.
“Some of them may use the funds for debt relief, trying to get that monkey off their backs,” Sister Korrie said in an interview with America on Jan. 8. “But many of the countries use it for services to the people, providing those basic needs.
“The S.D.R.s are the tool, and then countries can convert those funds to use—to buy medicines, food for their people—a variety of uses.”
Sister Koorie and her co-signatories had high hopes this week that Pope Francis would be joining them in the appeal for a new S.D.R. round. Responding to the global debt crisis has been one of the pope’s notable priorities as the church begins a Jubilee Year in 2025.
In his Word Day of Peace message on Jan. 1, he said, foreign debt, “has become a means of control whereby certain governments and private financial institutions of the richer countries unscrupulously and indiscriminately exploit the human and natural resources of poorer countries, simply to satisfy the demands of their own markets.”
Contacts with the Vatican, she said, indicated the pope was likely to raise the matter with the president. Unfortunately, the president’s final overseas visit, which was scheduled to include a visit to the Vatican to meet with the pope, was canceled on Jan. 8 after Mr. Biden decided to remain in-country because of the unprecedented wildfire crisis in California.
In their letter to the president, the Catholic signatories noted that Mr. Biden had previously endorsed a $650 billion S.D.R. round in 2021. “We commend you for this decision, which in one fell swoop provided the developing world with more resources than an entire year of foreign aid from all countries,” they wrote. “These resources were used to purchase and distribute vaccines, to care for the vulnerable, and to invest in health care for the poor. Hundreds of thousands of lives were likely saved.”
Now debt-relief advocates want the Treasury Department to support a new distribution of $650 billion in S.D.R.s as a global slowdown predicted by the I.M.F. threatens to tip at least 80 low- and moderate-income states into a debt crisis in 2025. As the largest contributor to the I.M.F., the voting power of the United States should be enough to activate a new round of these disbursements.
“The conditions facing the world today demand your support once more,” the Catholic signatories write. “Amidst an accelerating debt crisis, increasingly catastrophic climate change-driven natural disasters, and economic shocks exacerbated by international conflict, humanity is facing a perilous path ahead.
“As fellow Catholics, we are called by our faith to do all that we can to alleviate the suffering of others. You have an opportunity to do so on a nearly unprecedented scale, impacting the lives of millions at no cost, with little more than the stroke of a pen. We urge you to do so.”
Dan Beeton, the international communications director for the Washington-based Center for Economic and Policy Research, explains that S.D.R.s are especially welcome in debt-harassed states since they do not contribute to long-term debt burden. The center helped draft the letter to Mr. Biden.
According to Mr. Beeton, I.M.F.-approved loan packages from the World Bank and other international lenders have frequently had the effect of worsening conditions in economically struggling countries. Many end up squaring accounts with lenders by accepting I.M.F. austerity measures that sharply reduce spending on social services and health care, creating deeper human suffering among the poorest and most vulnerable in low-income, heavily indebted states. S.D.R.s, he explained, can be held by indebted states on reserve.
That strategy is often just enough to prevent them from being forced into disastrous loans that begin a debt spiral. Anyone who has struggled to pay off a student loan has a small inkling of how damaging that can be.
“What we saw with the 2021 allocation,” Mr. Beeton said, “was almost every single low- and middle-income country that received S.D.R.s put them to some kind of good use. And since that was still during the global pandemic, a lot of countries used their S.D.R.s in some fashion to help respond to the pandemic.”
In the end, he believes that the 2021 disbursement saved thousands of lives, and as economic uncertainty looms in 2025, the use of S.D.R.s can do so again, liberating struggling states from international debt servicing that can prevent them from responding to basic needs.
Mr. Beeton hopes the president can initiate a positive move from the Treasury Department on S.D.R.s and struggles to understand resistance to the disbursement, which he describes as cost-free to U.S. taxpayers. “The growth projections for the global economy are pretty dismal,” Mr. Beeton said, “and everybody recognizes there’s a growing global debt crisis that keeps piling up for these low- and middle-income countries.
“There’s the hunger crisis…you have over 300 million people around the world who are at risk of starvation…. In a lot of ways, [economic conditions now] are a lot bleaker than in 2021 when they made this major allocation.”
According to a report from the United Nations, more than 3.3 billion people live in low-income nations that pay more to service their debts than they allocate on health expenditures, and 2.1 billion live in states that pay more for debt than they spend on education.
Many of the most indebted nations suffer, Sister Korrie points out, because of political and economic policies that originate in the United States. That makes it the responsibility of the U.S. Catholic community to help however it can, she said.
“We lament the state of the world: ‘Oh what can we do?’ There’s a lot we can do,” she said. “One of the things that really spurs me on is remembering a quote from our founder, Catherine McAuley, in a letter in January of 1838…‘Little good can be accomplished or evil avoided without the use of money, and so we must be careful of it in large matters and small.’
“And I believe that is so true,” Sister Korrie said. “Here we have a chance to really do good for those who are most vulnerable among us, to those who might be voiceless, not able to speak for themselves at this time.
“We, who have the resources and the tools, we have to speak out. … I know we don’t do for people what they can do for themselves, but when they can’t, we have to be voices for those without [voices]. We’re acting in solidarity with our sisters and brothers in the Global South.”
The Weekly Dispatch takes a deep dive into breaking events and issues of significance around our world and our nation today, providing the background readers need to make better sense of the headlines speeding past us each week. For more news and analysis from around the world, visit Dispatches.
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